Plans to expand the state”™s natural gas network by 280,000 customers in 10 years were approved Wednesday by the Public Utilities Regulatory Authority.
Natural gas is typically 50 percent to 75 percent cheaper than petroleum-based sources, according to state reports, however just over a third of the state”™s residents have access to it.
By building up the infrastructure for natural gas, state officials hope to decrease energy costs and reliance on dirtier energy sources.
In a draft PURA ruling, customers who have natural gas available on their street, but are not yet connected, will be the prime targets for the program.
However, the initial setup costs can be expensive.
Both Southern Connecticut Gas Co. and Yankee Gas Co. expect capital budgets to more than double over the 10-year plan. Some reports even estimate the project to cost as much as $7 billion, split between the gas companies and customers.
So far PURA officials have denied requests for additional financial incentives. They’ve also tried to reduce the upfront costs for customer to connect to gas lines by allowing companies to charge a “premium” over current rates for 10 years. For customers “on main,” for instance, the premium would increase the total bill by less than 10 percent, still making it cheaper than oil-based energy.
Currently the initial cost to replace heating equipment for homes and businesses is typically $7,500 and $20,300, respectively, while annual savings are about $1,800 for homeowners and $3,300 for commercial businesses, according to the state”™s energy strategy.
“It”™s all about choice and we believe this is a critical tool in providing residents and businesses a choice,” Mitch Gross, a spokesman for Yankee Gas, told the Business Journal in June. “The challenge will be able to effectively execute all parts of the plan to meet the potential demand for customers.”
